Among the big U.S. financial companies, Wells Fargo & Co. has stood out as one that has kept its technology in the United States while others sent work to lower-cost markets around the world.
So its plan to open a technology center in Hyderabad, India, is a departure for the San Francisco banking company. In disclosing the plan Tuesday, Wells went to some effort to cast itself as something other than just the latest example of a company looking abroad for cheaper labor.
"This is not about money. This is about having the appropriate resources to get the job done for Wells Fargo," John Taylor, a senior vice president in its technology information group and its manager of enterprise vendor services, said in an interview Wednesday.
"We're positioning ourselves for the long term," he said.
The crux of the issue, according to Wells: It could not find the people it needs in the United States.
By establishing a center in India, Wells will bring in-house work that it is now outsourcing, Mr. Taylor said. It is using the outside contractors, including some in India, "because we don't have the resources to do it internally," he said.
Wells said no U.S. workers in this country would lose their jobs as a result of the center.
Just spin? Analysts tended to think not, even though Wells clearly has left open the possibility that the center could house 1,000 workers or more in the coming years.
Madhavi Mantha, a senior analyst at the Boston research and consulting firm Celent LLC, noted Wells' "almost apologetic tone" in its press release, saying the strategy differs from the big offshore initiatives others have undertaken.
"This isn't just about cost," Ms. Mantha said. "They're talking about a small number of people."
Christine Pratt, the research director for consumer banking and credit at Financial Insights Inc., a Framingham, Mass., research unit of International Data Group Inc., also said that the plan differs from earlier, large-scale announcements from other companies that focused on cost-cutting.
"This has a different flavor to it altogether," Ms. Pratt said. "They're very centered on their people. They're very careful about their positions in the community."
The center, which Wells calls a technology resource facility, is expected to open next quarter with 30 to 50 employees in a leased building.
The technology operation, a subsidiary of Wells Fargo Bank, could have as many as 300 staff members by the end of next year, Wells said.
Mr. Taylor said that Wells plans to construct a building to house the center over the next 18 to 24 months, and that the building could house 800 people by the end of 2008.
Eventually, "it could be something even bigger than that," he said.
The Indian staff would augment the work done by teams elsewhere in a variety of functions, including software development, Wells said.
"We're not going to move the development of one application to India. That's not our approach," Mr. Taylor said.
The center will follow "a team extension model," he said. "We operate with that model today. The teams are all in the U.S."
Mr. Taylor said he could not specify what kinds of projects the Indian staff would work on, except to say they likely would be new projects from different parts of the company.
Wells said the center would not have any customer-contact positions, such as call-center operators, and would not manage any information about customers.
The announcement culminated a six-month review that considered several nations and several cities within India, Mr. Taylor said.
"We looked at it several years ago and decided the timing was not right," but today "India is maturing," he said. "It was appropriate for us to make a move."
Other banking companies have been much more aggressive in moving work to foreign countries to reduce costs.
Washington Mutual Inc. said in May that it would cut 1,400 jobs, or 2% of its work force in the United States, while pursuing plans to move as many as 6,000 full-time jobs to India, Costa Rica, and the Philippines.
JPMorgan Chase & Co. said in December that it expects to hire 4,500 recent college graduates in India by the end of next year, doubling its head count there.
Wachovia Corp. has signed a series of foreign outsourcing deals to try to cut its expenses by up to $1 billion.
ABN Amro Holding NV said in September that it would save 10% of its annual information technology budget by outsourcing much of its technology development and maintenance to five vendors, three of them in India, starting next year.
